WestRock Company WRK reported fourth-quarter fiscal 2017 (ended Sep 30, 2017) adjusted earnings of 87 cents per share beating the Zacks Consensus Estimate of 81 cents by a margin of 7%.
Including one-time items, the company posted earnings of 76 cents per share in the quarter against loss of 34 cents per share in the prior-year quarter.
Operational Update
WestRock's total revenues rose 12.4% year over year to $4.061 million. Moreover, revenues beat the Zacks Consensus Estimate of $3.925 billion. The year-over-year improvement in sales was primarily driven by increased sales in Corrugated Packaging segment as well as Consumer Packaging segment sales. This helped mitigate the decline in the Land and Development segment's sales.
Cost of sales went up 13.5% year over year to $3.3 billion in the quarter. Gross profit improved 8% to $778 million. Gross margin contracted 70 basis points to 19.2% in the quarter. Adjusted segment EBITDA was $654.4 million compared with $588.8 million in the prior-year quarter. Adjusted operating margin was 16.1% in the quarter compared with 16.3% in the prior-year quarter.
Westrock Company Price, Consensus and EPS Surprise
Investors appreciate WestRock's efforts in the past year to make several investments that further strengthened and enhanced portfolio, while divesting businesses that were not core to its goal of being a premier provider of paper and packaging solutions. Consequently, the company has outperformed the industry in a year. The company has gained 20.8%, while the industry witnessed an increase of 16.4%.
Zacks Rank & Other Stocks to Consider
WestRock currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the industry are Stora Enso Oyj SEOAY and UPM-Kymmene Oyj UPMKY. Both the stocks sport a Zacks Rank #1 (Strong Buy).
Stora Enso has a long-term earnings growth expectation of 9.6%. You can see the complete list of today's Zacks #1 Rank stocks here.
UPM-Kymmene Oyj has a long-term earnings growth expectation of 5.1%.
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